RIAs adjusted over half of their ETF positions in 2024, incorporating extra funds and new managers into their allocations, based on a brand new research from
Atlanta-based AdvisorPro, an RIA and monetary advisor intelligence platform. This was as a result of elevated utilization of thematic and various ETFs.
The 2025 RIA ETF Traits Report, which AdvisorPor compiled by analyzing the 13F filings of 4,768 RIAs, additionally discovered that multi-sector and ultrashort bond ETFs noticed sturdy inflows and that the typical variety of ETFs per agency rose 14%, with two-thirds of RIAs growing allocations.
Moreover, whereas conventional issuers, equivalent to iShares, Vanguard and SPDR, stay the preferred asset managers with which RIAs work, corporations equivalent to JPMorgan, Dimensional and First Belief, amongst others, are gaining market share.
AdvisorPro’s evaluation recognized the surging adoption of thematic ETFs (together with crypto-based funds) as one of many extra important developments.
“Traditionally seen as area of interest or tactical allocations, thematic ETFs at the moment are being built-in into long-term funding methods, reflecting rising advisor confidence in sector-specific and trend-driven funds,” based on the report.
As well as, RIAs collectively added 667 new ETFs to allocations in 2024 that weren’t a part of any portfolios in 2023. Total, RIAs held positions in about 3,800 complete ETFs, so which means 17% of allocations have been to ETFs new to RIA portfolios in 2024.
Furthermore, AdvisorPro checked out what number of ETF positions have been purchased or bought in 2024 and located that RIA portfolios had a 51% turnover ratio. The agency additionally discovered that RIAs elevated the variety of ETFs they utilized by about 14% on common, rising from 73 distinctive ETFs in 2023 to 81 in 2024.
“Fastened revenue ETFs had important development in our evaluation, which is sensible given rates of interest and RIAs in search of yield,” mentioned AdvisorPro founder and CEO Michael Magnan. “There was additionally development in derivatives/options-based ETFs and defined-outcome methods that may mitigate danger. And if you wish to look instantly at thematic ETFs, of the highest 10 that skilled the best development, 4 have been based mostly on digital belongings.”
Magnan added that in analyzing the numbers, there appear to be two kinds of RIAs. One group consists of RIAs including nuanced and making some tactical adjustments to their portfolios. Others are buy-and-hold RIAs, which typically have a core set of choices that they don’t tinker with a lot.
In relation to issuers, 4,405 RIAs (about 92% of AdvisorPro’s pattern) use merchandise from iShares, adopted by 4,292 for SPDR State Avenue World, 3,960 for Vanguard and three,538 for Invesco. Schwab (2,638), First Belief (1,876), JP Morgan (1,875), VanEck (1,821), WisdomTree (1,583) and Dimensional (1,380) spherical out the highest 10.
By way of year-over-year development, nonetheless, Dimensional noticed a 13.5% enhance within the variety of RIAs utilizing its ETFs, adopted by JPMorgan (9.5%), WisdomTree (4.9%) and Schwab (4.2%), whereas iShares (0.3%), SPDR (1.3%) and Vanguard (1.4%) had decrease development charges because of the already excessive ranges of market penetration and the truth that among the faster-growing gamers have launched differentiated methods.
Amongst rising issuers with decrease market penetration, Neos Funds had the quickest year-over-year development, with 190 RIAs utilizing its ETFs in 2024, up from 85 in 2023, a rise of 123.5%. Different issuers with massive jumps included T.Rowe Value (250 to 429, 71.6%), Defiance ETFs (90 to 146, 56%), Virtus (177 to 277, 56.5%), Janus Henderson (506 to 767, 51.6%), Capital Group (469 to 703, 49.9%) and AllianceBernstein (83 to 123, 48.2%).
AdvisorPro recognized a couple of themes amid these issuers’ development, together with product combine (i.e., tax-efficient and options-based ETF methods), conventional asset managers transferring into the ETF house extra aggressively (equivalent to T. Rowe and Capital Group), and elevated use of energetic, thematic ETFs and fixed-income ETFs.
The report additionally recognized particular person ETFs with probably the most speedy year-over-year development in adoption by RIAs. A number of on the record included fixed-income methods, a class RIAs closely allotted to in the course of the yr.
AdvisorPro additionally ranked the highest 10 Morningstar classes by the proportion enhance in allocations.
“The strongest development got here from municipal bonds, fairness hedging, digital belongings and trading-oriented methods, reflecting a mixture of danger administration, various revenue technology and tactical positioning developments,” AdvisorPro acknowledged within the report. “Notably, digital belongings ETFs surged 246%, signaling a pointy rise in advisor confidence in crypto-related merchandise.”
Total, AdvisorPro counted 1,528 RIAs utilizing digital asset ETFs in 2024, up from 442 in 2023. That class had the most important uncooked development, though three different classes (Muni California Intermediate, Fairness Hedged and Leveraged Fairness) had increased proportion development off smaller bases in 2023.